TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 411
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Khargone was a 100% export-oriented unit registered with Customs and Central Excise Division-I, Indore. Likewise, respondent No.4 M/s Maya Spinners Ltd., Plot No.21, Sector III Industrial Area, Pithampur, District Dhar was also registered with Customs and Central Excise Division, Pithampur. Respondent No.2 was engaged in manufacturing cotton yarn, synthetic yarn and blended yarn falling under the Schedule of the Central Excise Tariff Act, 1985. Respondent No.3 was also a 100% export-oriented unit engaged in manufacturing cotton yarn, synthetic yarn and blended yarn. 2.2 According to the petitioner, respondent No.3 imported manufacturing machines without payment of central excise duties of Rs.10,14,099/- and custom duties of Rs.51,00,988/- for the manufacturing of export goods. The Central Excise Intelligence conducted a search in the factory premises of M/s Kowa Spinning Ltd. and seized the Autoconer Machine (Autoconer System 238) valued at Rs.90,00,000/- vide panchnama dated 13.06.2003. Thereafter, a show - cause notice dated 20.03.1995 was issued for recovery of excise duty and interest to all three respondents. According to the petitioner, a sum of Rs.2,71,49,904/- is pending....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erged into the Bank of Baroda) had entered into an agreement of hypothecation with respondent Nos.3, 4 and 5 for a grant of the loan amount of Rs.5,00,00,000/- for which "Mortgaged Property" was hypothecated. M/s Maya Spinners Ltd. deposited its title deed to create an equitable mortgage of its property situated at village Aurangapura. 3.3 A show-cause notice dated 11.12.2000 was issued followed by a demand notice dated 20.02.2001. The Bank applied for recovery of debt from M/s Maya Spinner Ltd. and others before the Debt Recovery Tribunal, Jabalpur. The Tribunal passed an award against the borrowing company on 17.08.2010 thereafter, the Bank of Baroda affixed the letter of possession on the wall of the company on 23.08.2023. M/s Maya Spinners Ltd. immediately approached the DRT by submitting an application seeking a stay of the recovery on the grounds of the stay granted by this Court in Writ Petition No.2218 of 2006. Notices were issued on the said objection and the reply was filed by the bank and vide order dated 30.10.2023, the learned DRT has rejected such objection FACTS OF Writ Petition No. 1480 of 2024 04. M/s Maya Spinners Ltd. filed a Writ Petition No.1480 of 2024 bef....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the record. 08. So far as the Writ Petition No.2218 of 2006 is concerned, the Central Excise has filed Annexure P/1 to show that the total dues against the respondent Nos.3 to 7 are 2,71,49,904/-, there is no seal and signature of any competent authority on this document. No document has been filed to substantiate the aforesaid recoveries of excise duty against respondent Nos.3 to 7. The petitioner has not filed a copy of orders passed by the Assistant Officer in respect of recovery of the aforesaid excise duty and penalty. On the contrary, the Dena Bank (now the Bank of Baroda) approached the DRT under the provisions of the DRT Act in which the order or recovery was passed way back in the year 2010. This auction notice was issued in the year 2005 by MPSIDC, but thereafter the Dena Bank as a consortium bank in which the MPSIDC was also included, approached the DRT and got the order of recovery against the borrower companies, therefore, this notice dated 12.03.2014 has lost its effect even otherwise, because of the stay granted by this Court, this notice was not given effect. Hence, Writ Petition No.2218 of 2006 has been rendered infructuous. 09. So far as Writ Petition Nos.2241 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der cannot be quashed merely because a security interest is created in respect of the very same property is not worthy of acceptance. However, what is required to be appreciated is that, in the present case, the confiscation order is not being quashed merely because a security interest is created in respect of the very same property. On the contrary, the confiscation orders, in the present case, deserve to be quashed because the confiscation orders themselves lack any statutory backing, as they were rooted in a provision that stood omitted on the day of the passing of the orders. Hence, it is this inherent defect in the confiscation orders that paves way for its quashing and not merely the fact that a security interest is created in respect of the very same property that the confiscation orders dealt with. 53. Further, the contention that in the present case, the confiscation proceedings were initiated almost 8-9 years prior to the charge being created in respect of the very same properties in favour of the bank is also inconsequential. The fact that the charge has been created after some time period has lapsed post the initiation of the confiscation proceedings, will not provid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to enforce their charge, notwithstanding the government dues payable under the Customs Act. 36. The view and the ratio we have expressed is in consonance with the decision of this Court in Punjab National Bank v. Union of India34. A similar view has also been expressed by a three-Judge Bench of this Court in ABG Shipyard Liquidator v. Central Board of Indirect Taxes & Customs 35, with references to the provisions of the Insolvency and Bankruptcy Code, 2016 (for short "IBC") and the Customs Act. In this context, the three-Judge Bench in ABG Shipyard Liquidator35 has referred to Section 238 IBC to observe that Section 238 IBC clearly overrides any provision of law which is inconsistent with IBC. This judgment has also made reference to Section 142-A of the Customs Act, which reads thus: "142-A. Liability under Act to be first charge.- Notwithstanding anything to the contrary contained in any Central Act or State Act, any amount of duty, penalty, interest or any other sum payable by an assessee or any other person under this Act, shall, save as otherwise provided in Section 529-A of the Companies Act, 1956 (1 of 1956), the Recovery of Debts Due to Banks and the Financial In....